VMware Explore Adopting - or increasing the use of - a proprietary computing architecture like IBM's POWER is a very niche thing to do in 2024. Yet in June, Big Blue suggested doing just that: employing its single-supplier stack as a replacement for the VMware stack.
IBM cited changes Broadcom brought to the virtualization giant as a reason for abandoning the VMware on x86 arrangement that has been the de facto datacenter standard since the mid-2000s. Since Broadcom finalized its acquisition of VMware in November 2023, it shifted from perpetual licenses to subscriptions, moved from per-socket pricing to per-core licensing, and decided to sell only bundles of software that include support.
In a promo for POWER, IBM highlighted a customer that expects its VMware bills to rise by 500 percent as a result of those changes.
VMware by Broadcom rejects accusations it has increased prices, suggesting rather that the market misunderstands its new bundles are cheaper than the previous combined cost of the products they contain, and that support - previously a separate purchase - is included in its subscriptions.
But Gartner VP analyst Michael Warrilow disagrees.
It is disingenuous to think the vast majority of VMware customers will not be paying more per year.
"It is disingenuous to think the vast majority of VMware customers will not be paying more per year," he told The Register.
Warrilow said that Broadcom's bundles also mean customers often pay for software they don't already use - or may not want to use.
Gartner believes most VMware customers' bills will grow by 200 to 500 percent when they next renew licenses.
Joseph Sweeney, an advisor with Australian analyst firm IBRS, said organizations he's spoken with report price increases in the 200 to 450 percent range.
"From our observations, it's the middle of the market that is being hit hardest. And Broadcom has made no secret it wants to focus its attention on the lucrative and even more 'locked in' larger enterprise market," Sweeney noted.
"VMware clients are all apprehensive, anxious, seeking awareness and planning alternatives," Naveen Chhabra, principal analyst at Forrester, told The Reg by email. "They are apprehensive of their own future with VMware, they are anxious about when time comes what will their renewal look like, and hence they are collecting all information for awareness in advance and they are exploring alternatives for migration."
Those alternatives are not alluring. Warrilow explained that VMware is so ingrained in customers' datacenters that rip and replace projects represent unwelcome risk. And migrations to direct alternatives like Nutanix or Microsoft are like-for-like swaps that won't improve users' IT estate.
"Where is the value in moving to an equivalent?" he asked.
The value of sticking with VMware is also currently hard to assess. While Broadcom promised an extra $1 billion of R&D funds to produce a more integrated and automated version of VMware's flagship Cloud Foundation hybrid cloud suite, the fruits of that investment are currently slim.
The chip giant did deliver a solid upgrade of Cloud Foundation in June 2024 - but that's the only substantial evidence of progress to date.
Broadcom CEO Hock Tan has repeatedly promised delivery of such a suite, saying it's the thing customers want and the way to ensure VMware has a long-term future.
Attendees at this year's VMware Explore - the annual customer conference that starts tomorrow - therefore have obvious starting questions: When will they see Broadcom's strategy in action, and will it be worth paying for?
Gartner's Warrilow told The Reg that Broadcom needs to offer answers - and soon - because VMware customers have done their research on alternatives.
"Customers will need to see the value if they are paying between two and five times as much as they used to," Warrilow observed, adding that he thinks Broadcom has until the 2025 version of Explore - scheduled for August - to deliver.
If Broadcom can't satisfy customers, VMware's rivals - and even some friends - are waiting.
Direct VMware rivals like Nutanix and Scale Computing aren't being shy about their ability to offer a migration path to an environment that resembles VMware's. Nor is a little outfit called AWS that is already running events encouraging migration from VMware to its cloud - even migrations from the VMware on AWS cloud service.
HPE has created a virtualization product that looks a lot like a direct rival to VMware.
Open source virtualization alternatives like XCP-NG and Proxmox are also aware they have a moment to shine. Even Citrix has re-entered the server virtualization market with a revamped Xen Server and a free tier designed to meet the needs of smaller VMware customers.
Storage vendor NetApp, a staunch VMware ally, recently told The Register it's currently busy consulting with customers to help them understand how to reduce VMware licensing costs by optimizing use of Virtzilla's VSAN virtual storage software. If that effort sees some data move to NetApp kit or services, the storage vendor will not mind one bit.
And for those VMware users who want to cling to their perpetual licenses, third-party support providers like Rimini Street have entered the market.
Whatever is announced at VMware Explore will have the potential to make those competitive offerings more or less relevant.
The Register will be there to bring you the news, and our view of what this year's event means for the VMware faithful. ®
https://www.theregister.com//2024/08/26/vmware_explore_preview/
Created by Tan KW | Aug 26, 2024
Created by Tan KW | Aug 26, 2024
Created by Tan KW | Aug 26, 2024
Created by Tan KW | Aug 26, 2024
Created by Tan KW | Aug 26, 2024
Created by Tan KW | Aug 26, 2024